End the Costly Integration Ban – Part II

Published September 19, 2014

For almost eight years, I have been urging, along with other Free State Foundation scholars, an end to the costly so-called “integration ban.”This outdated, costly FCC regulation bans cable operators from integrating the security and programming navigation functions in set-top boxes.

The supposed rationale for the integration ban, which was implemented in 2007, was to promote the availability of an independent retail market in set-top boxes. But, as I explained in my July 25 blog, “End the Costly Integration Ban,” from the very beginning, “in light of the competition among multichannel video providers that already then existed, it was clear that the costs imposed by the mandated separation of security and program navigation functions outweighed the consumer benefits.” The blog explains, at considerable length, and with links to several of FSF’s works on the subject, why it is time — indeed, way past time — to end the integration ban.

To its credit, the House of Representatives’ bill reauthorizing STELA included a provision ending the integration ban. Now, to my dismay, I have read that Senator Ed Markey plans to try to add a provision to the Senate STELA reauthorization that would reinstate the integration ban in some form. For all the reasons spelled out in “End the Costly Integration Ban,” I sure hope he doesn’t succeed.

The reality is that over his long career, Sen. Markey has always equated more regulation of the communications marketplace with more competition. There may have been some merit to that view, at least in particular instances where segments of the communications marketplace remained monopolistic,  when then-Rep. Markey first articulated this proposition 30 years ago. But there is no doubt, as explained in my blog and the other referenced Free State Foundation work, that the video services marketplace, including the market for all sorts of navigation devices and services, is now competitive.

Sen. Markey’s invariable view equating continued regulation with “protecting competition” is now woefully outdated, certainly including this instance. Sen. Markey’s position may, in fact, provide some help in propping up particular competitors in some situations for some amount of time. But in markets that are already subject to competitive forces, consumers almost always are the losers.

I hope the Senate Commerce Committee will see the wisdom in the House bill ending the costly integration ban — and, in doing so, put consumers’ interests first. 

[Originally published at The Free State Foundation]